Ernst & Young research finds high-performing companies
putting more emphasis on the development of "softer" attributes in
its potential C-level leaders. HR can play a part in helping high potentials
develop and master these intangible skills, experts say.

By Mark McGraw

Tuesday, September 3, 2013

It
seems the skill set of the ideal executive is evolving.

That's
according to New York-based Ernst & Young, whose recent research found high-performing
companies much more likely than their lower-performing counterparts to consider
"softer" qualities important for C-level leaders.

In
Paradigm Shift -- Building a New Talent Management Model to Boost Growth,
Ernst & Young asked 596 CEOs, C-level executives, senior managers and
directors what they consider to be the most important attributes a potential
C-level leader should possess.

The
largest number of executives (47 percent) from high-performing companies -- based
on a combination of revenue growth and earnings before interest, taxes,
depreciation and amortization --said they value a potential leader's ability
to lead effectively in an international business environment, compared to 37
percent of low-performing companies saying the same. Forty-four percent of
executives with high-performing companies said they most desire leaders who can
articulate and embody the values and culture of the organization, versus 37
percent of executives from low-performing organizations seeking the same.

Just
21 percent of respondents at top-performing firms said they most value a leader's
grasp of financials, with 27 percent of low performers citing a potential
leader's financial acumen as his or her most vital asset. Neither group seemed
to put a great deal of emphasis on finding C-level leaders who are good risk
managers, with 12 percent of respondents from high-performing companies rating
risk management as an important attribute, compared to 13 percent of
participants from low-performing organizations.

These
figures are indicative of top organizations' desire to develop a next
generation of leaders with an expanded breadth ofexperience, says Bill
Leisy, global talent management markets leader with Ernst & Young and
co-author of the study.

For
example, would-be executives "getting international exposure is really
important to a lot of companies," says Leisy.

An
increasingly global marketplace is a key contributing factor to this particular
trend, he says, as new and emerging markets require different cultural competencies.

"It's
[a matter of] being able to manage in different cultures. We've seen high
performers in, say Brazil, not be effective in another market," says Leisy.
"It's knowing what motivates employees in different markets as well as
knowing the culture."

In
addition, the circumstances of the Great Recession have put increased focus on
leaders' abilityto manage through tumult here at home.

"One
of the important softer skills is being able to not only have [diverse
experience] in cultures and transactions, but [being able to] manage people
through difficult economic times."

Just
as leaders' skill sets are evolving, so too is the way companies approach how
they measure and evaluate talent, says Kim Shanahan, managing director of Los
Angeles-based Korn/Ferry International's Human Resources Center of Expertise.

"Think
of the advances we have made in the assessment and training of athletes,"
says Shanahan. "We can now determine whether an athlete is more likely to
suffer from an injury, whether he or she has the mental capacity to be an
effective team player, and whether he or she can handle pressure."

The
same is true for evaluating talent in business, she says.

"Many
high-performing companies understand they need to look at their talent in a
holistic manner, and this includes [seeking] those softer skills that can make
or break an executive.

"High-performing
companies tend to be more sophisticated in how they view talent,"
continues Shanahan, "while their lower performing counterparts are focused
many times on survival, which can mask some of those critical soft skills."

Indeed,
forward-thinking organizations are expanding the definition of what makes an
effective leader, says Marie Holmstrom, the Charlotte, N.C.-based director of
talent management and organization alignment with Towers Watson.

"Organizations
really have two things to work with: They have money and they have people,"
says Holstrom. "So, leaders have to manage the financial side, but that's
only half the equation.

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"At
its core, the essence of leadership is the ability to influence. By definition,
[leaders'] role is not to make the day-to-day operational decisions," she
continues.

"Companies
have moved away from the 'command and control' decision-making style. Managing
day-to-day decisions takes away [leaders'] perspective and capacity to focus.
Leaders must lead through others. You don't accomplish that only with technical
skills. You have to have [those skills], but to achieve the next level of
success, you have to be able to lead through others."

Admittedly,
the softer, sometimes-less tangible skills can be tough for HR to identify, and
difficult for some would-be leaders to develop and master.

Luckily,
HR has a variety of tools at its disposal to help spot leaders who possess such
skills, or show the potential to develop them, says Shanahan.

"Assessment
and development tools and programs have come a long way over the years,"
she says. "For example, there is a big investment behind learning agility.
When used in conjunction with other assessment tools, one can create a powerful
view of an individual, and then tailor the individual's development."

In
terms of nurturing the softer skills necessary for today's leaders to excel, HR
must have a clear understanding of "what positions need what experience,"
says Leisy.

"I'm
talking about leadership positions, managerial positions, technical roles,
etc.," he says. "[HR must ask], 'What type of experience do these
positions need for the future?' Then the next level of the discussion becomes 'How
do we get them that experience?'

"You
start building it into career paths, succession plans and individual
development plans, then you globally mobilize the individual – help them gain
international experience, give them exposure to transactional as well as
transformational and merger and acquisition-type work, put them in a
shared-services environment," says Leisy.

"The
measurement of [HR's] effectiveness will be on those things in the future – maintenance
of the talent pipeline and the retention of high potential [employees], but
more importantly, the development of those high potentials, and where they are
in the organization."